The bill amends Section 44-5-13.11 of the General Laws in Chapter 44-5, which pertains to the assessment and taxation of local taxes related to low-income housing. The new legal language specifies that any qualifying low-income housing that has received an occupancy permit on or after January 1, 1995, and is encumbered by a covenant in favor of a governmental unit or the Rhode Island housing and mortgage finance corporation, will be subject to a tax of eight percent (8%) of the previous year's gross scheduled rental income. The bill also introduces a definition for "qualifying low-income housing," which includes low-income units as defined by federal law and affordable housing as defined by state law, provided they were approved for tax treatment by December 31, 2024.

Additionally, the bill removes references to "residential property" and the requirement for substantial rehabilitation as defined by the U.S. Department of Housing and Urban Development. It clarifies that the tax treatment will now align with federal definitions for low-income housing while allowing existing affordable housing units to retain their tax benefits if they were approved prior to the specified date. The act is set to take effect upon passage.